Legal Grind

The Centers for Medicare and Medicaid Services (CMS) Program Advisory and Oversight Committee (PAOC) has met three times since it was established last year.

Following the first two meetings, you may have seen reports expressing concerns about CMS' progress in addressing the issue of standards and accreditation. Committee members and the provider community have stressed the importance of having appropriate standards for many years. Many have expressed the view that had appropriate standards been in place, the "Wheeler Dealer" initiative that proposed to combat dealer fraud would have been unnecessary.

Everyone agrees that uniform quality standards are essential to protect beneficiaries under competitive bidding. Uniform quality standards will ensure that every supplier is accountable for providing the same, objectively verifiable level of quality. At the PAOC meetings last year, CMS stated that standards would be an important component of competitive bidding, but PAOC members remained concerned because there was little indication of how CMS intended to approach standards.

These concerns were legitimate given the critical role that standards will have in competitive bidding. The good news is that CMS has begun to address quality standards and appears to be moving in the right direction. At the third PAOC meeting in February, CMS presented an outline of how it will approach the quality standards question. Over the last several months, CMS' contractor -- RTI International -- met with the existing accrediting bodies to examine their standards and accrediting processes. As a result, RTI identified the types of standards that typically characterize legitimate businesses. These standards cover areas such as an organization's financial management, human resources and patient/client management. CMS will develop specific standards that fall within each of these categories within the next several months. The goal is to have standards in place well in advance of the implementation of competitive bidding.

At the February meeting, CMS also addressed the role of accrediting bodies in implementing the standards. Accrediting bodies must qualify under existing CMS regulations in order to be accorded "deeming" status. This means that a provider accredited by that organization will be "deemed" to be in compliance with the new quality standards. In other words, the accrediting organizations will also have to meet CMS standards. Importantly, CMS is giving serious consideration to "grandfathering" providers who are already accredited. Understanding that there may well be a rush for accreditation as the deadline for starting competitive bidding approaches, it is also likely that unaccredited providers in a competitive bidding metropolitan statistical area (MSA) will have priority under the CMS policy.

Once fully implemented, accreditation and quality standards will play a pivotal role in how the DMEPOS benefit is administered by Medicare. The Medicare Modernization Act (MMA) requires that providers who bill the Medicare program be accredited. How CMS will roll out this requirement is still unclear. Certainly, everyone must pay close attention to standards and accreditation. These are not merely competitive bidding concerns. Eventually, all providers must be accredited to do business with Medicare -- not just those in the largest MSAs.

There are still many issues about competitive bidding that remain undecided. For example, there is no clear indication of what policies will be adopted to preserve opportunity for small suppliers. CMS has not identified the items that will be subject to competitive bidding, nor has it identified the MSAs that will be first. Other aspects of competitive bidding remain theoretical. These include the mechanics of how bids will be submitted and how the winning bidders will be chosen. There will be more information on these issues this summer.

CMS intends to publish a proposed rule outlining its options for implementing competitive bidding. Anyone interested will have the opportunity to submit comments. CMS will review the comments and publish a final rule in the spring of 2006.

This article originally appeared in the April 2005 issue of Mobility Management.